Counterfeit Software Can Cost Businesses in Many Ways

REDMOND, Wash. — March 23, 2009 — Even the most ethical companies face the threat of counterfeit software entering their business environment. In times when resources are tight, business owners may run a quick search online and find a sealed copy of the required software selling at a bargain-basement price — or perhaps even just a few dollars lower than the actual retail price. In most cases, they end up unintentionally buying pirated software from vendors that sell painstakingly forged software packages.

Software piracy is reaching epidemic proportions across the globe. In a recently published white paper, “The Surprising Risks of Counterfeit Software in Business,”1 Microsoft Corp. revealed that 37 percent of the 30 midsize companies in the study had unknowingly purchased counterfeit software. All of the counterfeit software was professionally packaged and looked deceptively genuine, down to the detail of imitating embedded holograms.

Cori Hartje, senior director Microsoft Genuine Software Initiative

Says Cori Hartje,, senior director of Microsoft’s Genuine Software Initiative: “It’s obvious that the strategy of software pirates is to create high-quality counterfeit software that is designed to deceive. The study reveals just how prevalent the problem is within the business environment. The best way to protect companies is by educating people about software piracy and providing tools to help identify and prevent the risks of counterfeit software before they purchase and install it in their workplace.”

Small Business, Big Risks

The paper supports an industry-wide concern: as piracy grows in sophistication, the likelihood of its entering business environments increases dramatically. In each instance, the business owners who purchased and installed the software, in good faith, were surprised to learn that they had spent an average of $10,222 (U.S.) for products that were neither licensed nor genuine.

“Small and midsize businesses become easy, unsuspecting victims of counterfeiters who take advantage of customers looking for a bargain on their software,” says Hartje. “Like larger enterprises, these businesses also wrestle with the demand to maintain and upgrade their software. But when they make their purchases from the least expensive vendor instead of a trusted advisor, they can easily end up with pirated products, ultimately resulting in greater losses through employee downtime and product replacement.”

Beyond raising obvious concerns about intellectual property and copyright infringement, counterfeit software can also contaminate business networks with malware. Companies that become victims of software counterfeiters can end up exposing their business to data loss, prolonged downtime and identity theft.

Says John Gantz, chief research officer and senior vice president with IDC: “While technology has become more sophisticated, unfortunately so have the software pirates. Counterfeit software can look just like the genuine product, while actually containing malicious code that can infect entire business networks with viruses and install Trojan horses designed to steal private data.”

Building Awareness

Sophisticated packaging makes it difficult to distinguish the genuine product (right) from the counterfeit (left).

Today’s software pirates meticulously copy fine details and price pirated copies just slightly lower than genuine software to dupe businesses into purchasing counterfeit software. The increased sophistication of illegal duplication makes it even more challenging for customers to distinguish pirated products from the “real thing.”

Through its Genuine Software Initiative, Microsoft is educating customers and providing tools in order to protect companies from becoming victims of piracy. Microsoft’s How to Tell Web site ( features an extensive gallery of high-quality, mid-quality, and low-quality counterfeit software packaging examples to help customers identify counterfeit products.

“The bad guys change strategies, and we have to stay ahead of them,” says Hartje. “With high-quality counterfeit software, where the packaging is very good and the price is reasonable, it can be difficult for a customer to tell the difference. The best way to protect your business network is to always purchase products from reliable sources, stay away from deals that look too good to be true and remain vigilant about what’s entering your computing environment.”

How Can You Tell?

Pirated software can look like the real thing. Samples of counterfeit (left) vs. genuine (right) versions of Microsoft Windows Server.

Microsoft provides several free and easy-to-use tools for customers to identify if their software is genuine, as well as monitor their software inventory. In addition to using How to Tell to identify the visible piracy prevention features of genuine Microsoft software, customers can run a free genuine validation check for their installed copy of Microsoft Windows or Office at the Genuine Microsoft Software Web site (

To manage their existing software assets, customers can use a simple, free tool designed for networks that have up to 250 computers. The Microsoft Software Inventory Analyzer (MSIA) ( can help determine what Microsoft software is installed on computers within the business. The tool scans the network and creates a report for the business to review; the data from the report is not sent back to Microsoft and remains completely confidential. “Managing software assets is a strong starting point for identifying areas of weakness where the business is exposed to risks,” says Hartje. “We encourage customers to implement processes to help them recognize what software they have purchased and where it’s running, and be proactive in managing their technology inventory.”

Duped? Take Charge

For businesses that discover they are a victim of counterfeiting, it is important to immediately remedy the situation. While Microsoft provides several resources to support customers duped by counterfeit software, such as those found at, Hartje maintains that the most effective way for customers to ensure they don’t become victims is to be proactive.

“The findings from our latest research clearly indicate that good businesses can be defrauded by high-quality counterfeit software, and we want to do everything we can to protect our customers,” she says. “No business wants to unintentionally line the pockets of counterfeiters, especially in these tough times when resources are tight.”

“The Surprising Risks of Counterfeit Software in Business,” Microsoft, March 2009

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